Jennifer Phan had been working in VC for three years before she decided to take a leap of faith to become a founder herself.
It wasn’t an overnight decision, however, but one that required “very long and hard” thought.
“VC is so hard to crack or get into, that it was hard for me to pull the trigger and make the jump out of it. Because you think, ‘this is such a privileged job, how could you think about leaving it?’ Especially for me as a woman with a minority background,” says Phan, who cofounded her creator economy company Passionfroot in 2021.
Phan is one of many who have left the highly coveted career path that a role in VC represents. Many young people are falling over themselves to break into an industry that promises face time with the brightest entrepreneurs — and a healthy paycheck.
But as fundraising challenges have hit the industry and firms slow investing or downside, more people are cycling out of the industry. Women, in particular, have left European VC firms in the past year. For some, “life after VC” is a stepping stone to founding a business or becoming an operator, while others choose to pursue entirely different careers.
The founders
For Saket Kumar, former VC at Global Founders Capital and La Famiglia, making the jump from VC to entrepreneur came from a niggling desire he had to solve a particular problem: financial services for startups.
He left his job in VC in 2019 to pursue his idea and cofounded Vitt, a fintech providing non-dilutive financing to SaaS companies, a year later — something he never dreamed he would end up doing.
“If you had asked me a year into La Famiglia in 2018, I would have said that I was going to be in venture for, like, the next 10 years,” says Kumar.
Phan also had never intended to found a tech company, but similarly became enraptured with a startup idea which led her to leave VC. Alongside her full-time investor job, she had a monthly newsletter called “Tech for Good“ with thousands of subscribers. As a creator herself, she knew that there were few tools out there to help creators, many of whom are self-employed, manage their clients and cashflow — so she decided to build a platform for those things herself.
As a VC you're almost like playing chess; it’s very strategic. While as a founder, you’re actually on the field as one of those players
“I think many people leave VC to become founders because they want to be in the driver’s seat,” says Phan. “It's one thing to recommend certain things to your portfolio companies, to look at their business model and ask founders in the pitch, ‘have you thought about x, y, z?’, and it's another to then actually do it.”
“As a VC you're almost like playing chess; it’s very strategic. While as a founder, you’re actually on the field as one of those players,” adds Phan.
The other joyful aspect of being a founder is being able to make a noticeable difference within a company daily. As a VC, it can take years to see whether a company you invested in and supported will turn out successful.
“In venture, if you find the deal that returns the fund, that could take a 10-year journey with ups and downs and markdowns and whatever — like, who knows, it’s so far away,” says Kumar.
“Whereas, as a founder, if my team is thriving, if you build something that matters, if you see customers are picking it up, you’re going to see that on a daily basis. That’s really rewarding.”
The operators
Another reason why investors choose to leave VC is to get operational experience.
Jasmin Heimann, a former associate at Zurich-based early-stage firm Lightbird Ventures, believes there are not yet enough VCs in Europe who have first-hand experience of running, or working at, a tech startup.
That’s why she chose to leave VC after three years in the industry to work at supply-chain integration platform Procuros as chief of staff — a generalist role that allows people to “roll up their sleeves and get ‘builder’ exposure across many levels of an organisation”, she tells Sifted.
Alexander Farr also exchanged venture for the chief of staff life. He previously worked as an associate at Flash Ventures, a now-defunct pre-seed investor started by Rocket Internet, and is now at Superchat, a messaging solution for businesses.
Farr says that working in VC gave him valuable experience in financial modelling, recruitment and international expansion — essential skills for startups. But the chief of staff role allows him to work across many aspects of a business and “see direct results immediately”, whereas VCs only know if their bets work out many years later.
He adds that having operational experience will make him a better investor if he chooses to return to the industry in the future.
“It will be helpful in terms of sharing war stories with entrepreneurs… providing inspiration and being a reliable and understanding contact person,” he says.
Like Phan, leaving venture was not an easy decision for Procuros’s Heimann to make.
It was hard for me to admit that I didn't 100% see a fit (in VC) anymore
“It was hard for me to admit that I didn't 100% see a fit (in VC) anymore,” she says. “And if you know the industry, there’s a lot of FOMO and hype and everything… I struggled quite a bit to know what to do next, even though I knew something had to change.”
Reward structures often complicate things further. “As an investment manager or principal, you are incentivised with carry, and so it can be a big decision on whether you want to stick with a fund and participate in the upside or leave,” adds Heimann.
The breakaways
For some investors, leaving VC is an opportunity to do something wildly different.
Siddharth Choksi worked in VC for six years, most recently at Dutch early-stage fund Peak, and then decided to leave his venture career behind to work at his family’s diamond business (though he still angel invests on the side).
The business — which like others in the sector still operates largely offline, with the majority of transactions completed via email or WhatsApp — was first started by Choksi’s grandfather in the 1950s when he moved from India to Antwerp, Belgium, to take part in the city’s booming diamond trade. To this day, Antwerp’s diamond district is the largest in the world, with 84% of the world’s rough diamonds passing through on their way to the customer.
“When you grow up in a family business environment, it’s always in the back of your head (to go and work there). It’s all you talk about in dinner conversations,” says Choksi, who recently relocated from Amsterdam to Antwerp to live with his parents and learn the ropes of the diamond trade.
Choksi felt the “time was ripe” to join the company as it’s one of the last remaining industries to be moved online.
There are tons of opportunities, he says, to add a tech layer to the industry, with some players beginning to build blockchain solutions to trace supply chains and B2B marketplaces for the online purchase of diamonds, and experiment with lab-grown diamonds.
“If I know that in the next 10 years the industry is going to be disrupted, I might as well jump in now,” he says, even though he’ll be starting his new career as an intern and will have to work his way up.
Nearly all the former investors Sifted spoke to said that they left VC before they got further embedded in the industry, either by taking on more responsibilities in the firm, acquiring more board seats or being financially tied to the success of the fund via carried interest.
For Paulina Lutz, a former investor at Earlybird who focused on ecommerce, leaving VC after four years felt like the perfect time as she wasn’t yet ready to take on a partner role. And she was keen to experience what it was like on the other side of the investor table.
She’s now starting her own D2C underwear brand, designing the lingerie herself. It’s a good way to use the financial and people skills she learned as a VC while pursuing a creative career.
“It got to the point where I just didn’t have a reason anymore not to do this,” says Lutz.
